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Louisville to consider blight designation for former Sam's Club

Council divided on city's role with big box building

By Doug Pike

Colorado Hometown Weekly

Posted:
07/24/2014 04:25:19 PM MDT

Updated:
07/24/2014 04:30:41 PM MDT

Louisville City Council will consider a blight designation for its largest retail building following a discussion last week about what direction to take with the vacant former Sam's Club building on McCaslin Boulevard.

Officially labeling the property as blighted would be the first step in the possible revitalization of the 127,000-square-foot building through an urban renewal plan.

In February, Seminole Land Holding LLC and Centennial Valley Investment LLC purchased the former Sam's Club site, which has been vacant since 2010, for $3.65 million.

The city earlier this year contracted Urban Revitalization Consulting to conduct a conditions survey on the property, and last week received a report from URC's Austin Patten.

Patten said the property appears to meet the definition of a "blighted area" as defined by Colorado state statutes. In order to create an urban renewal area based on blight, a property must meet at least four of 11 factors listed in state statutes.

The Sam's Club building, 550 S. McCaslin Blvd., has four blight factors, including its vacancy, Patten said.

Because the front doors are positioned on a narrow side of the building, Patten said it creates a long and narrow space that would be difficult to partition into multiple tenants.

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The property, which includes a 600-plus car parking lot, also exhibits potholes, cracked curbs and other signs of low maintenance.

But the biggest blight factor is the restrictive covenants attached to the property, Patten said.

The Sam's Club was developed in the 1990s as part of a multi-site retail center that includes surrounding properties like Albertsons grocery store. Covenants were put in place during development to prevent competition between tenants in the same retail center.

Additional restrictions were attached to the property when it sold earlier this year, so in addition to the non-compete clauses, no entertainment, recreation or discount merchandise businesses can occupy the space.

"It's very broad and it's pretty heavy-handed," Patten said. "The ultimate result of these restrictive covenants is that many tenants who would be able to fully utilize a 127,000-square-foot facility would be prohibited from doing so."

Louisville Mayor Pro Tem Hank Dalton, who was the lone council member to oppose contracting for the conditions survey, said the city shouldn't get involved because the property owners bought the building fully aware of the restrictions attached to it.

"It's not rocket science to figure that we would go from here to findings of blight, and then from there possibly to a condemnation proceeding to eliminate these burdensome conditions of blight in favor of the owner," Dalton said. "But the current owner of the property bought the property knowing these conditions were in place and when he bought it, the additional conditions that were put in place he signed on to by buying it."

Dalton said while Louisville took a significant sales tax hit four years ago when Sam's Club pulled out, city sales tax figures have since surpassed the levels they were at when Sam's Club was still in the mix.

"It isn't as though we're on our knees and needing a financial shot in the arm that might be produced by the revitalization of this property," Dalton said.

Louisville Mayor Bob Muckle said after a four-year vacancy, revitalization of the site will require the city's help.

"Not only is the site blighted in the official use of the term under the state statutes, it's having a blighting influence on the entire McCaslin retail corridor," Muckle said. "There are many residents who are concerned about how long it's been vacant and I think it needs something in the way of help to facilitate its redevelopment. This urban renewal power I believe is what it's going to take to get that site redeveloped."

A motion by Muckle directing city staff to draft a resolution for the determination of blight for the property passed 4-3. Dalton and council members Ashley Stolzmann and Jayme Moss cast the dissenting votes.

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